Texas surplus lines premium up 14.8% in April
Texas’s excess and surplus lines market showed no signs of a Covid-19 slowdown in April, with the Surplus Lines Stamping Office of Texas (SLTX) recording $741.7mn in premium - up 14.8 percent over April 2019.
The April increase continued a run of every month this year setting a new record for surplus lines premium in Texas, which is the second biggest state for E&S business.
For the first quarter, $1.67bn of E&S premium was recorded in the state, up 14.5 percent over the first quarter of 2019.
April’s total of $741.7mn in premium was the highest recorded by month so far this year, followed by March with $622.75 million.
SLTX reported that various types of surplus lines coverage have experienced growth in 2020 over 2019. As of the end of April, oil and gas property premium was up 39.3 percent, flood was up 37.6 percent, and fire and allied lines – the largest coverage code – was 24.8 percent from 2019.
When it released its first quarter figures last month, SLTX had noted it was unclear how coronavirus would affect the market going forward. E&S premium recorded in Texas generally rises during the summer months.
The April growth in E&S premium in Texas came despite the state being under a stay-at-home order from Governor Greg Abbott for the month.
Abbott allowed his stay-at-home order for the Lone Star State to expire at the start of May, and instigated a phased end of social distancing measures. Retail stores, restaurants and theatres were allowed to reopen but with occupancy limited to 25 percent.
Texas recorded the second biggest premium total among US states in 2019. Its $6.95bn in premium placed it behind California, with $10.3bn.
More generally in the E&S market, some reported the coronavirus had reduced submissions but quoting activity remained high.
For example, E&S specialist Kinsale reported that submission growth for the first quarter had been on course to be around 30 percent for the first quarter.
On an earnings call on 1 May, Brian Haney, chief operating officer at the Richmond, Virginia-based carrier, said this slowed to a single-digit rate in the first few weeks of lockdown but recovered significantly in the last two weeks of April to the low to mid-20 range.
Haney commented that the submission slowdown had one benefit in that it allowed underwriters working from home to get out more quotes than previously.
“So while submission growth has moderated in response to the Covid situation, quote growth has stayed high and, combined with the rate increases, we’ve been able to continue to grow the premium at a healthy pace,” he said.